US STOCKS-Futures slightly higher ahead of 'cliff' deadline

NEW YORK, Dec 31 (Reuters) - U.S. stock index futures rose
on Monday, setting up Wall Street to snap a five-session losing
streak as talks continued in Washington over resolving the
"fiscal cliff".

* Negotiations were set to continue on Monday between
lawmakers and the White House on how to deal with the $600
billion in automatic tax hikes and spending cuts that kick in at
the start of January and could drag the economy in recession.

* The Senate reconvenes on Monday after the open of equity
trading with only hours to find some sort of stop-gap deal that
would also have to be passed by the House of Representatives.

* Despite the gains in futures market, stocks still could
fall on Monday when the cash markets open if there is no sign
lawmakers are making progress.

* While hope for a broad deal has largely evaporated, the
lack of panic on markets shows that investors still expect
officials to find a solution to the budget problems early in the
New Year. The measures that kick in on Jan. 1 will have only a
gradual impact.

* While midnight on Monday marks the deadline for a deal,
the government can pass legislation in 2013 that retroactively
prevents the United States going over the fiscal cliff, an
option that is viewed as politically easier.

* European markets were slightly down on Monday morning,
although trading was muted as markets in Germany, Switzerland,
Italy, Denmark, Norway, and Sweden were closed while UK, French,
Dutch and Spanish markets were only open for half a session.

* U.S. stocks dropped on Friday, with significant losses in
the last minutes of trading, as prospects for a deal worsened at
the beginning of the weekend.

* The S&P 500 closed at 1,402.43 at 4 p.m. ET on Friday,
down 1.1 percent, but futures continued to fall before closing
15 minutes later with a loss of 1.9 percent. S&P futures and the
S&P cash index do not match point-by-point, but the size of the
disparity on Monday points to a weak opening in stocks.

* On Sunday, President Barack Obama, appearing on NBC's
"Meet the Press," said investors could begin to show greater
concerns in the new year.

* Investors have remained relatively sanguine about the
process, believing it will eventually be solved. In the past two
months markets have not shown the kind of volatility that was
present during the fight to raise the debt ceiling in 2011.

* Rather, equities have largely performed well in the last
two months despite constant chatter about the fiscal cliff,
though the last few days shows a bit of increased worry. The Dow
industrials and the S&P 500 each lost 1.9 percent last week,
after stocks fell for five straight sessions, which marked the
S&P 500's longest losing streak in three months.

* The CBOE Volatility Index rose to its highest level
since June on Friday, closing at 22.72.